Most small businesses are highly driven by passion. Whether the business owners are completely committed to their venture or begin as side hustlers, over time, they get comfortable with calculated risks. Often times, we see that these people are genuinely enthusiastic about their entrepreneurship, which surpasses their fear of failure. However, small business owners in the UAE, who run their business without liability insurance are exposing themselves to substantial risk.
Studies and surveys based on small business by specialist insurers have unearthed mind-boggling facts about the way small business owners think and act. Most entrepreneurs who run their businesses as side hustlers are motivated by two major reasons- 30% of the survey respondents wanted to fulfil the dream of starting their own business while 25% wanted to follow their passion in an industry that is completely unrelated to their full-time employment.
The study further revealed that about 31% of the respondents didn’t have liability insurance to protect their business, due to lack of knowledge about its need or unaware of the kind of insurance they need. While the reasons differ, the hard fact that people who run their businesses uninsured are in for a disaster in the long run.
Is Your Business Exposed To Risks?
All businesses attract a certain amount of risk. Accidents and mistakes are very much commonplace and things break every now and then. This is one reason why you need liability insurance for your business.
Damages to your business assets and functioning can happen anytime. It could be due to devastating weather events or due to social unrest. An expected loss of materials or theft can leave your business high and dry in a matter of hours. It is important to understand that a business will succeed not only due to its profit margins but also due to its resilience through adversity. So, it is important to protect your business at every step with the necessary insurance policies.
To effectively protect your business, you need to consider getting a liability insurance and business property insurance for your small business in the UAE. Insurance companies often offer a BOP or a small business owner’s policy, which provides both theses policies wrapped into one. Further, if your business owns a vehicle, you will also require commercial vehicle insurance. Having these primary coverages in place will reduce the risks involved in running your business.
Why do you need liability insurance for your business?
Liability insurance helps cover the cost of liability claims made against your business. This insurance comes in several different forms. Two of the important ones you need for your small business are the general liability and professional liability.
General liability insurance helps cover all the cost incurred due to liability claims made against your business for property damage or physical injuries. It helps cover the costs of claims where your business is held responsible for damage to someone else’s property or body.
Professional liability insurance, on the other hand, covers all the costs incurred due to the claims that your business committed errors in your products and services. For instance, if you a client is unsatisfied with the performance of your product or service, he or she can make a claim against your business for poor services. Your professional liability insurance can help cover the costs to settle this claim.
This liability insurance also covers errors due to clerical mistakes from both the business owner as well as the employees of the business.
What does Small Business Insurance Cover?
Small business insurance combines the features of general and professional liability insurance. It covers the costs of liability and property damage claims as well as replace the lost income in your business in case your business is running in loss. Some of the other coverages offered under this are-
- Worker’s Compensation Insurance: Provides benefits to employees who are injured or fall sick on the job. If the employee dies in a work-related injury, the benefits can be paid to his or her family.
- Business Income Insurance: This helps to replace lost income if you must temporarily shut down your business due to an incident that is covered in the insurance.
- Commercial Flood Insurance: This helps cover the costs incurred due to the property damages caused by floodwater.
For all your business insurance related queries, contact our insurance brokers at the earliest.